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Gekko

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Posts: 776
Reply with quote  #1 

-

STEPS TO BUILDING WEALTH

1. Liquidate all bad debt and become debt-free. Start paying off all loans and credit card debts now. If you're in a hole, stop digging and get out.

2. Keep your monthly overhead expenses low. Do you really need ten premium cable channels and six telephone calling features? Eliminate them now and apply the saved monthly payments to either your debt reduction or savings. Avoid recurrent monthly expenses.

3. Pay cash for everything and get out/stay out of debt. If you can't pay cash for something, you can't afford it. A house and an education are the obvious exceptions. But - be conservative with your mortgage commitment (Put a minimum of 20% down and don't exceed a mortgage of 2x your annual salary). Borrow, at the most, 80% loan-to-value (LTV) on a 15-year fixed-rate conventional mortgage where the total payment is no more than 1/4 of your takehome pay. Your mortgage payments should not exceed 25% of your net income. Get a 15 or 30 year traditional mortgage with a fixed rate. Make extra payments on your mortgage towards principal every month. When your mortgage is paid off you have peace of mind and can sleep good at night. Don't ever take out home equity loans to pay for improvements or toys - always pay cash. Pick a college with reasonable tuition costs. The name of the college isn't as important as what you do while you're there and what you do when you get out. Buy your house and own it for a long time. Buy (Don't Lease - Leasing is the most expensive way to drive a car) a highly reliable, quality car new or slightly used and keep it for a long time (10+ Years). Once you have your house and cars paid for you can save obscene amounts of money. Don't get caught up in revolving debt or monthly payments. Consumer debt is not good. Remember that you never make money by paying interest. Don't spend more than you make. Live within your means. Get ahead of the curve!

4. Keep some cash equal to at least 1 year's gross salary in a low cost liquid checkwriting money market fund (Vanguard Prime Money Market Fund or Tax Free Money Market Fund). Systematically and automatically add to it every month and never touch it. Automatically reinvest all interest/dividends. Increase the monthly amount invested at least annually. This cash is for emergencies only or to use to buy long-term assets (house). Prepare for the inevitable "rainy day". Dig your well before you're thirsty. "Piggy bank" savings will make your life a whole lot easier if you suddenly find yourself jobless.

5. Systematically and automatically invest a fixed, large percentage (minimum 10%) of your gross income every month into a low cost (no load, low expense ratio), diversified, tax efficient, U.S. stock index mutual fund (Vanguard Index 500 Fund or Vanguard Total Stock Market Index Fund) and don't touch it for at least 10 years. Dollar Cost Average and Pay Yourself First. Increase the amount invested at least annually. Automatically reinvest all dividends and capital gains. Don't dump a big chunk of money into the market all at one time - gradually average it in over a long period on a monthly basis in order to hedge against a sudden market downturn. Make sure your stock allocation does not exceed the number 100 minus your age. Put the rest in a Money Market, Bond Index Fund, or a Municipal Bond Fund. Rebalance your portfolio at least annually. If you only have $1,000 to invest, buy the Vanguard STAR Fund. If you have less that $1,000 to start, save it up in a bank account until you do.

6. Max out your retirement plan (401K and/or IRA) contributions and direct them to a low cost diversified stock index mutual fund. Never touch it until retirement.

7. Stay the course and Keep it Simple. Stick to your strategy and follow your plan. Ignore the so-called "experts" and tune out all of the outside noise. Realize that most analysts, brokers, advisors, and other "stockpickers" are usually wrong, biased, self-interested, and self-serving. Don't blindly follow financial services people's recommendations - recognize that their agenda may be different from yours. Remember that no one has a crystal ball and no one knows for sure where the market or any particular stock is going in the short-term. Ignore the short-term movements of the market and think long-term. Stay diversified and don't chase "hot" momentum sectors or stocks. Stick with diversified funds vs. Betting on Individual stocks. There's too much concentrated risks in Individual stocks and it's difficult to dollar cost average into them. Follow your plan and not the herd. Don't try to time or beat the market. Buy and Hold. Increase your monthly investment amounts during market downturns. Investing and wealth accumulation is a marathon, not a sprint. Keep it simple. You only need just a few good mutual funds - you don't need twenty. You don't need anything fancy or exotic. Fancy and exotic will cost you money. The best plan is a simple plan. Simpler is better. Stick with the simple, straightforward approach that's cheap, unlikely to blow up in your face, and is proven to work.

8. Set realistic net worth goals and track your progress at least quarterly. Take pride and satisfaction in your financial accomplishment as you see your net worth statement grow.

9. Don't price your lifestyle for perfection. Establish a lifestyle based upon that which you can control....just because you made $100K, $250K, or even $500K last year, don't count on it occurring again, instead figure on what you can pretty much guarantee...that should be the lifestyle gauge. You have to plan for things to happen in your future that may not be ideal. You can't price perfection into any part of your future. Pricing perfection into your future can be extremely dangerous. Don't assume that everything will always go like it had always gone. Anytime you price perfection into your future, it generally ends up being a mistake. There is almost always going to be some sort of setback. Expect it, but plan for it and be versatile enough that you are able to make adjustments. If you don't have a contingency plan, then any setback will catch you unaware and unprepared. This is where you can learn from the past but not dwell on it. It is inevitable that at some point things will happen to you again that you don't expect. You should prepare for those things now. Don't be paranoid, just prepared. Preparation means you don't lose sleep over the future. Being paranoid means you lose sleep because of the future. Having your finances in order allows you to weather the storm when bad things happen to you. Set yourself up so that you can "hunker down" for a while if you have to. It's rarely the "Savers" that get hurt.

10. Think long and hard about your purchases - especially the big ones. Ask yourself - Is this really a need or is it just a want? Why am I really buying this? How will this affect my financial future? Don't chase status symbols. Ignore the impulse to constantly upgrade and rush out to buy the newest, "latest and greatest" model. Ignore the need for Immediate Gratification. Repair before you replace. Financial success demands some sacrifice. Find a balance. Absurd, conspicuous consumption is a sucker's game. Trying to "Keep up with The Joneses" and be the "Big Shot" is a sucker's game. The "Big Shot Complex" will kill you. Realize that the debt-ridden, over-leveraged, wanton spender "wannabes" around you are financially self-destructing themselves. Realize that financial independence is much more important than displaying high social status. Plan, save, and pay cash for your big purchases rather than running out and immediately buying them. Choose your luxuries wisely and sparingly. Don't buy things you don't need. Be selectively extravagant and prudently frugal. Live within your means and save and invest your money. Understand that money equals security and power. Don't throw your money away, but when something is important to you, buy the BEST. A big purchase is a commitment so buy exactly what you want and buy the best because you will be committed to that product for a long to so you should be happy with it and have no regrets. But - Celebrate saving! Life is about experiences, not about material possessions. What's really important is not how much you make, but how much you keep. Understand that real wealth equals freedom, security, and power. Being a Millionaire is a lot better than just trying to look like one. Being stuck on the treadmill in the rat race, living paycheck to paycheck isn't intelligent. Don't make yourself a slave trapped to your job/debt/expenses and at their mercy. Strive to be Bulletproof and Liquid. You might want to/have to peel back from work someday! It's nice to have the option. No, you "can't take it with you", but being old and poor is no fun. Life on the Bread Line is no fun. You could die tomorrow but you could also live to 100. Don't underestimate your life expectancy. Your degree of wealth will directly affect your future quality of life. Social Security may not be around to help you. Money is power, and when you can pay cash all kinds of doors open. Save and invest or else you will be forever poor.

11. Be a compulsive saver. Save when you can, buy when you must. Save every opportunity you can get. The right time to save is always now. If you come into a big "windfall" or "found money" save most if not all of it. Dump a big chunk of it into the money market fund and then go treat yourself by spending a small piece (1-5%) of the sum on something you really want.

12. Work to maximize your income. First, get yourself in a position to be successful. Then, work at being a success. Push to increase your income! Work hard and ask for raises. Pick an occupation or business that you enjoy but that pays well and is in demand. Watch out for the opportunity costs of not working for even short periods of time. Stay employed at all costs!

13. Protect your assets and income. You only need to get rich once. Run away from "get rich quick schemes" or risky new business ventures as fast as you can no matter how good you think they sound. There is no magic bullet. Don't "play" the market with stocks tips, "inside information", or go on margin. Invest with good mutual funds for the long-term. If you absolutely must speculate, do it only with money that you can afford and are prepared to lose. Limit your losses and cut your winnings. Get married only once - Divorces are very expensive. Get a prenuptial agreement just in case. Buy a $1-3M+ Umbrella Personal Liability insurance policy in case somebody tries to sue you. You can't totally avoid risk, but you can minimize it and protect yourself against it. Make sure you have enough insurance. If something were to happen today to your house, car or health, would you have enough insurance to cover it? Make sure you have enough coverage, particularly Disability insurance that would provide income should an injury prevent you from being able to work. Buy Term Life Insurance (Not Whole Life) equal to about 5-7 times your annual income if you have a family to protect. Buy Term and invest the difference.

14. Enjoy life, live well, stay healthy, reward and treat yourself, treat others, be generous, help others, appreciate life, have no regrets, eat well, dress well, vacation well, do what truly makes you happy, but realize that happiness is only a state of mind. If your financial house is in order, it is much easier for you to keep your personal life and well-being in order. This includes your family, friends, and your own physical and mental health. You need to be sure to live within your means and save for your future. It's always fun to blow money. But, you need to find a medium where you are enjoying life and also preparing for a future at the same time. That doesn't mean you have to make yourself miserable now because you are planning for your retirement. You have to enjoy life now; there is no guarantee you will be on this earth until retirement. Life is about living, not just existing. However, money and opportunities are too hard to come by to just waste them foolishly. Find the balance.

15. Start Now! You don't get rich by being stupid.

 

*DISCLAIMER: The above text is OPINION ONLY and should not be construed as investment, legal, or other advice. *

 

 

haggis

Senior Member
Registered:
Posts: 116
Reply with quote  #2 
Read a lot, and widely.

Nearly every 'new' situation you encounter is a variation on an old theme which has been documented and analyzed (Isaac Newton lost his fortune in the South Sea Investment Bubble).

Many of the best investment thinkers have put great effort into recording their thought processes and philosophies - learn from them!

Cheers.
RonaldStarr

Senior Member
Registered:
Posts: 1,440
Reply with quote  #3 

Gekko—NY---------------

 

Thanks for your thought piece.  It is evident that you spent a lot of time writing and editing it.  Virtually no typos, good grammar—well written overall.

 

I feel that “The Millionaire Next Door” by Danko gave a good indication of what it takes to be wealthy: live beneath your means and put your extra money in high-return investments.  This is pretty much the same message you provide.  And I endorse this approach.  I have gotten enough assets together to support me for the rest of my life once I get more of my assets switched from CA high-value properties with low cash flow to OK low-value properties with high cash flow.

 

I do disagree with a couple of your suggestions. 

 

First, number 3.  You suggest paying down your home mortgage early so you can sleep well at night.  Usually a home mortgage is the least costly money you will ever borrow.  It is far better, in my opinion to get a long-term loan and pay it off only as agreed.  Instead of paying down the loan early, use the money to invest in a higher-return proposition.  My own recommendation is to put it into leveraged, positive-cash-flow rental properties for the long term.  When you pay down a loan early you can think of your “return” on that that “investment” as being the interest payments you don’t have to make.  That means your return equals the interest rate of the loan.  As that is cheap money, you are getting a very low return, probably about 5-8% a year.  If instead you put that money into leveraged rental properties, your return should be something on the order of 15-40% a year.  A far better return than paying down the mortgage.  How do you sleep at night knowing you owe a lot of money against your home?   For me it is easy.  I see the money coming in from the rental properties to pay on that home mortgage.  I see the buildup of wealth over time from the better investment.

 

In that same point you say: “Remember that you never make money by paying interest”  I’d say that you should revise that statement to be: “Remember that you can often make money by paying interest.  However, this is so only if you have used the borrowed money to invest safely at a higher rate of return than you are paying on the borrowed money.”  Don’t borrow money for consumer spending.

 

Then you continue with “Don't spend more than you make. Live within your means. Get ahead of the curve!”  Yes.  That is the basic point of much of what you have written here.

 

Second, number 7.  You suggest investing in stocks.  I feel that the returns are far higher with real estate investments than stocks.  As I mentioned above, you can expect about 15-40% a year return on your equity or your initial cash investment with properties in the earlier years.  And you can continue to get very good returns by “releveraging” when your returns go down and putting the newly borrowed money to work with more real estate investing.  With stocks, you can expect to average about 7% a year return.  This number is the best estimate for the real return of stocks by average investors as stated by PhD economist Gary W. Eldred in his book “Value Investing in Real Estate.”

 

If you want less management-intensive investments than real estate, I’d recommend investing in mortgages or trust deeds.  If you have been a real estate investor for some time you should know how to do careful due diligence and get “paper” that is very low risk and high return, from about 8-40% a year.  Again, much better than the stock market.

 

Now, I still do agree with a lot of what you have to say.  Staying away from speculative ventures and other peoples tips and touts.  Analyze situations and prospects carefully.  Enjoy life.  And there is a lot of other wisdom in your advice.

 

Oh, another one with which I disagree.  Number 4.   You recommend having a liquid cash reserve equal to one year’s gross income.  This advice probably was good when it was first propagated, perhaps in 1900 to 1930 or so.  These days it is not at all good advice, I believe.  Instead, have some lines of credit or credit cards upon which you have little or no balance.  These will tide you over in case of an emergency.  This is far less expensive than keeping all that money in a low-paying savings account, CD, or other liquid form. 

 

Your advice on making money is overall valuable, I feel.  I hope that I have returned some of the value to you by putting forth some ways to look at things differently.  It seems to me that you have put together a mixture of good advice and old advice you probably heard from other  people.  Some of that old advice, it seems to me, is not the best advice.  I have indicated what I feel is better advice.  I hope that you can refine your thinking on this topic by re-evaluating some of the points.

 

Oh, and you might want to add to your subject line.  It seems to me that you deliver more than you promise.  Perhaps it would be accurate to call it "Steps to Building and Preserving Wealth."

 

Good Investing and Good Posting**********Ron Starr**********

 

 

 

 

 

 

 

 

samzell

Senior Member
Registered:
Posts: 688
Reply with quote  #4 

Excellent posts Ron & Gekko!  Great reading and thanks for the contributions.  I find it valuable for me to continue to re-read these fundamentals as I often loose sight of them.

 

Millionaire Next Door was a great book.  I need to re-read it.

mike

Senior Member
Registered:
Posts: 607
Reply with quote  #5 
Quote:
Originally Posted by Gekko

-

STEPS TO BUILDING WEALTH

1. Liquidate all bad debt and become debt-free. Start paying off all loans and credit card debts now. If you're in a hole, stop digging and get out.

2. Keep your monthly overhead expenses low. Do you really need ten premium cable channels and six telephone calling features? Eliminate them now and apply the saved monthly payments to either your debt reduction or savings. Avoid recurrent monthly expenses.

3. Pay cash for everything and get out/stay out of debt. If you can't pay cash for something, you can't afford it. A house and an education are the obvious exceptions. But - be conservative with your mortgage commitment (Put a minimum of 20% down and don't exceed a mortgage of 2x your annual salary). Borrow, at the most, 80% loan-to-value (LTV) on a 15-year fixed-rate conventional mortgage where the total payment is no more than 1/4 of your takehome pay. Your mortgage payments should not exceed 25% of your net income. Get a 15 or 30 year traditional mortgage with a fixed rate. Make extra payments on your mortgage towards principal every month. When your mortgage is paid off you have peace of mind and can sleep good at night. Don't ever take out home equity loans to pay for improvements or toys - always pay cash. Pick a college with reasonable tuition costs. The name of the college isn't as important as what you do while you're there and what you do when you get out. Buy your house and own it for a long time. Buy (Don't Lease - Leasing is the most expensive way to drive a car) a highly reliable, quality car new or slightly used and keep it for a long time (10+ Years). Once you have your house and cars paid for you can save obscene amounts of money. Don't get caught up in revolving debt or monthly payments. Consumer debt is not good. Remember that you never make money by paying interest. Don't spend more than you make. Live within your means. Get ahead of the curve!

4. Keep some cash equal to at least 1 year's gross salary in a low cost liquid checkwriting money market fund (Vanguard Prime Money Market Fund or Tax Free Money Market Fund). Systematically and automatically add to it every month and never touch it. Automatically reinvest all interest/dividends. Increase the monthly amount invested at least annually. This cash is for emergencies only or to use to buy long-term assets (house). Prepare for the inevitable "rainy day". Dig your well before you're thirsty. "Piggy bank" savings will make your life a whole lot easier if you suddenly find yourself jobless.

5. Systematically and automatically invest a fixed, large percentage (minimum 10%) of your gross income every month into a low cost (no load, low expense ratio), diversified, tax efficient, U.S. stock index mutual fund (Vanguard Index 500 Fund or Vanguard Total Stock Market Index Fund) and don't touch it for at least 10 years. Dollar Cost Average and Pay Yourself First. Increase the amount invested at least annually. Automatically reinvest all dividends and capital gains. Don't dump a big chunk of money into the market all at one time - gradually average it in over a long period on a monthly basis in order to hedge against a sudden market downturn. Make sure your stock allocation does not exceed the number 100 minus your age. Put the rest in a Money Market, Bond Index Fund, or a Municipal Bond Fund. Rebalance your portfolio at least annually. If you only have $1,000 to invest, buy the Vanguard STAR Fund. If you have less that $1,000 to start, save it up in a bank account until you do.

6. Max out your retirement plan (401K and/or IRA) contributions and direct them to a low cost diversified stock index mutual fund. Never touch it until retirement.

7. Stay the course and Keep it Simple. Stick to your strategy and follow your plan. Ignore the so-called "experts" and tune out all of the outside noise. Realize that most analysts, brokers, advisors, and other "stockpickers" are usually wrong, biased, self-interested, and self-serving. Don't blindly follow financial services people's recommendations - recognize that their agenda may be different from yours. Remember that no one has a crystal ball and no one knows for sure where the market or any particular stock is going in the short-term. Ignore the short-term movements of the market and think long-term. Stay diversified and don't chase "hot" momentum sectors or stocks. Stick with diversified funds vs. Betting on Individual stocks. There's too much concentrated risks in Individual stocks and it's difficult to dollar cost average into them. Follow your plan and not the herd. Don't try to time or beat the market. Buy and Hold. Increase your monthly investment amounts during market downturns. Investing and wealth accumulation is a marathon, not a sprint. Keep it simple. You only need just a few good mutual funds - you don't need twenty. You don't need anything fancy or exotic. Fancy and exotic will cost you money. The best plan is a simple plan. Simpler is better. Stick with the simple, straightforward approach that's cheap, unlikely to blow up in your face, and is proven to work.

8. Set realistic net worth goals and track your progress at least quarterly. Take pride and satisfaction in your financial accomplishment as you see your net worth statement grow.

9. Don't price your lifestyle for perfection. Establish a lifestyle based upon that which you can control....just because you made $100K, $250K, or even $500K last year, don't count on it occurring again, instead figure on what you can pretty much guarantee...that should be the lifestyle gauge. You have to plan for things to happen in your future that may not be ideal. You can't price perfection into any part of your future. Pricing perfection into your future can be extremely dangerous. Don't assume that everything will always go like it had always gone. Anytime you price perfection into your future, it generally ends up being a mistake. There is almost always going to be some sort of setback. Expect it, but plan for it and be versatile enough that you are able to make adjustments. If you don't have a contingency plan, then any setback will catch you unaware and unprepared. This is where you can learn from the past but not dwell on it. It is inevitable that at some point things will happen to you again that you don't expect. You should prepare for those things now. Don't be paranoid, just prepared. Preparation means you don't lose sleep over the future. Being paranoid means you lose sleep because of the future. Having your finances in order allows you to weather the storm when bad things happen to you. Set yourself up so that you can "hunker down" for a while if you have to. It's rarely the "Savers" that get hurt.

10. Think long and hard about your purchases - especially the big ones. Ask yourself - Is this really a need or is it just a want? Why am I really buying this? How will this affect my financial future? Don't chase status symbols. Ignore the impulse to constantly upgrade and rush out to buy the newest, "latest and greatest" model. Ignore the need for Immediate Gratification. Repair before you replace. Financial success demands some sacrifice. Find a balance. Absurd, conspicuous consumption is a sucker's game. Trying to "Keep up with The Joneses" and be the "Big Shot" is a sucker's game. The "Big Shot Complex" will kill you. Realize that the debt-ridden, over-leveraged, wanton spender "wannabes" around you are financially self-destructing themselves. Realize that financial independence is much more important than displaying high social status. Plan, save, and pay cash for your big purchases rather than running out and immediately buying them. Choose your luxuries wisely and sparingly. Don't buy things you don't need. Be selectively extravagant and prudently frugal. Live within your means and save and invest your money. Understand that money equals security and power. Don't throw your money away, but when something is important to you, buy the BEST. A big purchase is a commitment so buy exactly what you want and buy the best because you will be committed to that product for a long to so you should be happy with it and have no regrets. But - Celebrate saving! Life is about experiences, not about material possessions. What's really important is not how much you make, but how much you keep. Understand that real wealth equals freedom, security, and power. Being a Millionaire is a lot better than just trying to look like one. Being stuck on the treadmill in the rat race, living paycheck to paycheck isn't intelligent. Don't make yourself a slave trapped to your job/debt/expenses and at their mercy. Strive to be Bulletproof and Liquid. You might want to/have to peel back from work someday! It's nice to have the option. No, you "can't take it with you", but being old and poor is no fun. Life on the Bread Line is no fun. You could die tomorrow but you could also live to 100. Don't underestimate your life expectancy. Your degree of wealth will directly affect your future quality of life. Social Security may not be around to help you. Money is power, and when you can pay cash all kinds of doors open. Save and invest or else you will be forever poor.

11. Be a compulsive saver. Save when you can, buy when you must. Save every opportunity you can get. The right time to save is always now. If you come into a big "windfall" or "found money" save most if not all of it. Dump a big chunk of it into the money market fund and then go treat yourself by spending a small piece (1-5%) of the sum on something you really want.

12. Work to maximize your income. First, get yourself in a position to be successful. Then, work at being a success. Push to increase your income! Work hard and ask for raises. Pick an occupation or business that you enjoy but that pays well and is in demand. Watch out for the opportunity costs of not working for even short periods of time. Stay employed at all costs!

13. Protect your assets and income. You only need to get rich once. Run away from "get rich quick schemes" or risky new business ventures as fast as you can no matter how good you think they sound. There is no magic bullet. Don't "play" the market with stocks tips, "inside information", or go on margin. Invest with good mutual funds for the long-term. If you absolutely must speculate, do it only with money that you can afford and are prepared to lose. Limit your losses and cut your winnings. Get married only once - Divorces are very expensive. Get a prenuptial agreement just in case. Buy a $1-3M+ Umbrella Personal Liability insurance policy in case somebody tries to sue you. You can't totally avoid risk, but you can minimize it and protect yourself against it. Make sure you have enough insurance. If something were to happen today to your house, car or health, would you have enough insurance to cover it? Make sure you have enough coverage, particularly Disability insurance that would provide income should an injury prevent you from being able to work. Buy Term Life Insurance (Not Whole Life) equal to about 5-7 times your annual income if you have a family to protect. Buy Term and invest the difference.

14. Enjoy life, live well, stay healthy, reward and treat yourself, treat others, be generous, help others, appreciate life, have no regrets, eat well, dress well, vacation well, do what truly makes you happy, but realize that happiness is only a state of mind. If your financial house is in order, it is much easier for you to keep your personal life and well-being in order. This includes your family, friends, and your own physical and mental health. You need to be sure to live within your means and save for your future. It's always fun to blow money. But, you need to find a medium where you are enjoying life and also preparing for a future at the same time. That doesn't mean you have to make yourself miserable now because you are planning for your retirement. You have to enjoy life now; there is no guarantee you will be on this earth until retirement. Life is about living, not just existing. However, money and opportunities are too hard to come by to just waste them foolishly. Find the balance.

15. Start Now! You don't get rich by being stupid.

 

*DISCLAIMER: The above text is OPINION ONLY and should not be construed as investment, legal, or other advice. *

 

 

The funny thing is this is the bare minimum to survive. It will do nothing to make you financially independent which is becoming a survival requirement in the future. This is really just the CFP approach which i agree is a minimum requirement, but it is just the start. People following this will still be in a tough place in 20 years because they will still have too few assets (true assets) that bring in money every month to allow them to live comfortable.

 

I think you have to add that (especially when young) you need to take risks with investments and business ventures. But they must be taken in a way such that you won't totally be wiped out, but more important you learn from it and try again if it fails.

 

Mike

 

 

mbalensiefer

Senior Member
Registered:
Posts: 382
Reply with quote  #6 
Great post, Gekko!

You should edit and submit that piece to either Smart Money or Money magazine. If only I could stick to half of what you say. I also agree with alot of Ron's advice. I think the stocks/securities 7% figure is the net return, with dividends re-invested, for large-caps over time, AFTER inflation.
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